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Have Donna Help You Get The Best Price For Your Home
$250,000 Home Sale Exclusion
How To Avoid Tying Yourself Up With A 3 To 6 Month Listing.
Ten Simple Steps You Can Take To Ensure Your Home Sells At Top Dollar
When Selling Your Home, First Impressions, Can Help Make The Sale
The 9 Dumbest Mistakes Smart People Make When Buying or Selling A Home
Four Common Mistakes Made By Home Sellers... And How To Avoid Them
Sellers Estimated Closing Costs

Have Donna Help You Get The Best Price For Your Home

If you are thinking about selling your current home why not begin the process by contacting Donna Nelson of RE/MAX Experience? I'll consult with you on every aspect of the process with the single most important goal of selling your home quickly and for the most amount of money. Experience counts! Just fill in the blanks and hit the SUBMIT button below.
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$250,000 Home Sale Exclusion

Our tax law has changed the definition of luck. Win a $100,000 dream house and you're lucky all right - if you can pay the tax. Maybe you can auction off the garage and patio to come up with the $28,000 cash. Until 1997, you weren't much better off as an existing owner, either. If you bought your house before 1980, your house value has probably increased enough to make an Arab oil minister weep. And the difference between the price you paid for your home and the wealth of nations it now brings could be taxable capital gain. That's not a home, it's a tax time bomb.

Don't panic. Congress has enacted three measures to relieve most of the hardships rising home prices have created for homeowners. Which strategy you use depends on the date your home was sold in 1997.

Thanks to the 1997 tax bill, the likelihood you will ever owe taxes when you sell your home has decreased dramatically. The only losers will be those who own high-priced homes or those who have been constantly on the move, trading up to more expensive homes.

Under the 1997 tax bill, a $250,000 exclusion replaces the more limited $125,000 exclusion given to those over age 55 under prior law. It also replaces the law that allowed a homeowner to delay paying taxes on profits from home sales if you bought a more expensive home within two years of sale. However, these old law provisions still apply to home sales before May 7. 1997. And if you sold your home between May 7, 1997, and July 28, 1997 (entering into a binding sales contract by that date counts as if you sold it on that date), then you can choose whether to report your gain using the old or the new law. If you have a large gain, you may prefer to roll it over into another house and defer the tax under the old law.

$250,000 exclusion of gain - Home sales after May 6, 1997
For home sales after May 6, 1997, you may exclude up to $250,000 in gain from the sale of your home. Married couples filing joint can exclude up to $500,000 ($250,000 each if they file separate returns). It's easy to qualify. You merely have to own and occupy your house as your principal residence for at least two of the five years before the sale. You can take this exclusion time and again, as long as you live in each home for at least two years. Residence in a qualified, licensed facility (such as a nursing home) will count as time lived in your own home if you become physically or mentally incapable of caring for yourself during the five-year period before sale. In applying the once-every-two-year rule, sales before May 7. 1997. do not count.

Married couples may take the $500,000 exclusion if (1 ) they file a joint return, (2) either spouse meets the ownership requirement, (3) both spouses meet the use requirement, and (4) neither spouse has sold a home within the last two years. If you are filing joint, but were not sharing the residence you sold with your spouse, you may claim an exclusion of up to $250,000. Your spouse can also claim a $250,000 exclusion on the sale of the other home he or she has been living in.

If you marry someone who has used the exclusion within the last two years, you are limited to a maximum exclusion of $250,000. Once both of you meet the ownership and use rules and two years have passed since either of you claimed the exclusion, you may exclude $500,000 of gain on your joint return.

If you have postponed gain by rolling over prior home-sale proceeds into more expensive homes, the time you have owned and used your present home includes the period you owned and used the other residences.

If you are forced to sell your home before you meet the requirements for the exclusion because of poor health, change of employment, or some other unforeseen circumstance, you may claim a reduced exclusion. The amount you may exclude is computed using a formula based on how long you have owned and occupied your home, compared with the two-year eligibility requirement. For example, if you are single and lived in your home for 18 months before your employer transferred you to another city, you could exclude gain of up to $187,500 ($250,000 x 18/24). The reduced exclusion for married couples will be a percentage of the maximum $500,000 exclusion, if both spouses meet the use requirement. Exception: If you owned your home on August 5, 1997, you will qualify for a reduced exclusion if you sell before August 5, 1999, even if the sale did not result from an unforeseen circumstance.

If your home was transferred to you in a divorce, the amount of time your spouse or ex-spouse owned the house is attributed to you in meeting the ownership test. However, you must meet the use test on your own. But note: You are treated as using the house during any period of time in which your spouse or former spouse is living in the home.

What if your spouse dies? In that case, you get credit for the time your deceased spouse owned and used the property. If you sell your home in the year your spouse dies and file a joint return with your deceased spouse, you will be entitled to the $500,000 exclusion if the requirements for this joint exclusion were met (see above).

Because the exclusion is an election, you do not have to take it. For example, it might be to your benefit not to claim the exclusion where you have owned and used two houses as your principal residence during the past five years, and you plan to sell both within two years of each other. You will save more tax by electing out of the exclusion when you sell the house with the smaller gain, and saving it for the larger gain.

If your home is used partly for business or as an office, you must pay tax on any gain to the extent of allowable depreciation after May 6, 1997 (see Sale of home used for business or rental).

The exclusion applies to exchanges as well as sales of personal residences. For purposes of the exclusion, the destruction or involuntary conversion of your home is treated as a sale.

How To Avoid Tying Yourself Up With A 3 To 6 Month Listing.

An Easy Exit Listing Puts YOU In Control!

MONEY SAVING ADVICE: Never sign a listing based on vague verbal promises. Some agents will tell you whatever you want to hear in an effort to get you to sign a listing. Traditionally, real estate agents have required home sellers to sign long term listing agreements. Unfortunately, many sellers found that after listing their homes, the promised advertising and marketing efforts did not occur.

This is understandably a key reason why home sellers are concerned about listing their home with a real estate company. How do you know that the company will uphold their promises? How do you know that you have an agent who fully understands the art of marketing and is skilled at attracting a steady stream of qualified, ready-to-buy buyers through your home?

NEW PROGRAM: While a written agreement is necessary, there is no reason that you have to be locked into a long term listing agreement. Now the risk and anxiety associated with listing your home can be eliminated, thanks to my Easy Exit listing.

The Easy Exit listing allows you to cancel your listing at any time, for any reason. If at any time you are not 100% satisfied with my marketing effort, you can exit from the listing just by calling me on the phone or sending me a letter. No hassle. No questions asked.

WARNING: If you decide to list your home with a real estate company, don't be tied up by a listing without specific, written, verifiable performance guarantees and an Easy Exit listing. Your listing contract should state exactly and specifically what services and marketing the agent and company will do for you. What specific advertising, marketing, and positioning will you use to promote my home'? How often will I get an update on progress, either verbal or in written form?; How often will you review current market conditions as they are related to my home by informing me on what has sold, what has come on the market, and what has expired?

MOST IMPORTANT: Your listing contract should state that if the agent does not perform and produce results exactly as promised that you can cancel the listing, at no cost or further obligation to you. Without this protection clause, you are gambling with what may be your most valuable asset.

Real Estate Brokers and Agents skilled in effective marketing can sell your home for 6% more than an unskilled Real Estate Broker or Agent.

Ten Simple Steps You Can Take To Ensure Your Home Sells At Top Dollar

1. Selecting the right agent.
Finding the right agent can sometimes be very difficult. To start your search for the right real estate agent, ask for referrals from friends, relatives, or co-workers who have had a successful selling experience. Prior customer satisfaction is critical here, market share is not. Ask your agent, "Can you show me, in any capacity, that your past customers have been satisfied with your service?"

2. The listing process.
The listing agreement is basically an employment contract and must be in writing to be enforceable. Although there are many types of listing agreements the most advantageous to the home seller is the Exclusive Right To Sell multiple listing agreement. This gives the Broker the authority and obligation to distribute it to all members of the Broker's multiple listing organization, thus exposing your home to the larger market. When the property is sold, the commission is divided between the listing Broker and the selling Broker.

Question: Is the commission rate carved in stone? No, commissions are entirely negotiable. Our recommendation: be competitively priced and competitively commissioned. Don't pay more than you have to, to get the job done.

3. How long should a listing agreement run?
This is subject to current market and price segment conditions. If homes in your town and price range are selling within 30-60 days, three months is more than adequate. However, if homes in your town are taking 5-8 months to sell then the listing will be longer. In this case a 90 day listing will not cause your home to sell within a "reasonable time. (See also: "How To Avoid Tying Yourself Up With A 3 To 6 Month Listing.")

Money-Saving Tip: Make a list with names and addresses of any potential prospects with whom you came in contact before deciding to use a Broker, then get your Broker to agree to a reduced commission if someone on this list buys your house within the first month it is listed.

4. Having your home professionally inspected.
A professional home inspector can alert you to problems that could complicate a potential sale. Correcting these problems early not only makes your property more desirable but it also simplifies the negotiation process when the time comes for the buyer's pre-purchase home inspection.

Seller Disclosure: Home sellers who hide defects from buyers are asking for trouble. The principle of "caveat emptor"-let the buyer beware-doesn't apply anymore. Two-thirds of all lawsuits against real estate brokers, agents, or sellers, in the United States, allege misrepresentation for failure to disclose property defects. So to protect all parties involved in the sale of a home a seller disclosure statement is recommended. By disclosing all of the property's defects the seller is laying it out on the table and the buyer has no reason to carne back later and complain.

Money-Saving Tip: To avoid the possibility of a lawsuit after the sale get the buyer's written acknowledgment of any problems before you accept an offer.

5. Preparing your home for sale.
Preparing your home for sale doesn't have to mean making costly additions or remodeling. Most buyers looking for a home will want to plan their own major changes. All that is necessary will be cleaning, painting, landscape maintenance, and minor repairs. The closer to impeccable your home is, the easier it will be to show and sell.

Curb Appeal: The wise homeowner will improve the lot and outside of the house before it is put up for sale. Simple but neat landscaping can help the marketability. It makes dollars and it makes sense.

6. How much is it worth?
Value is defined as the cost vs. the benefit from the customer's point of view. Fair Market Value is defined as what a buyer is willing to pay and what the seller is willing to sell for when both are aware of its highest and best use and the property is "exposed" to the "open market" for a "reasonable" period of time. A Realtor's competitive market analysis will compare comparable properties that have sold and, importantly, those that have not. A good analysis will include the total number of homes on the market in any given month and the number of homes that have sold in that month, (Absorption Rate = Supply/Demand), the average number of days a home is on the market, and the percentage of list to sale price. The following questions will give you insight: What do the homes that have sold have in common? What do the homes that have not sold have in common? Is it advertising, marketing, Broker, or is it location, condition, price?

By Example: 100 competing homes between $200,000-$275,000 in a 4-town area 70 homes in a prime neighborhood location, 40 in top condition. Market absorption 15-20 homes sell per month out of 100. Critical deciding factor is price.

Caution: A Realtor's CMA may not include private sales, FSBO's or Sheriff foreclosures. The Realtor's CMA will, therefore, represent the highest retail value. Sheriff's sales represent the lowest wholesale value. Private sales invariably represent the value in between retail and wholesale.

7. Marketing your home.
Golden Rule: Increase demand = increase value. Your home is considered a commodity. To increase the largest segment of demand use the multiple listing system. 83% of all home sales are made by Realtors. Therefore, in order to sell the home "once" you must sell it "twice". Making your home accessible, attractive, and convenient, and easy to show to Realtors, means you have access to their customers and clients. Any showing restriction will reduce demand. A good Realtor will provide a Marketing Plan that will market your home to the most effective buying segment.

Caution: Classified ads contribute to approximately 15% of all home sales. You thought it would be more, didn't you? According to the National Association of Realtors' 1995 survey, nearly 57% of all home buyers knew their agent. were personally referred by someone who knew the agent. or were past customers of the agent Today the most effective form of marketing is to position your home within the Realtor community. Consumers today are process driven. Who do I trust to find me the right home? A Realtor Open House is more effective than a customer open house.

8. Analyzing and negotiating offers.
Our best recommendation is preparation. At the time you sign a listing contract ask your agent to review with you a purchase agreement. In order to effectively analyze and negotiate your offer your advanced knowledge and skill will be important. By "role-playing" a purchase agreement questions will be raised, strategies will be determined, and current customs, trends, disclosures, duties, rights and restrictions of all parties will be addressed and eliminate unwanted surprises.

9. What you should know about your buyer's financing.
In today's fast paced technological world, any prospective purchaser can be pre-qualified for a mortgage prior to finding a home. The levels of pre-qualification can range from an informal credit review to a complete buyer credit history analysis, including all 3 credit bureaus and credit scoring, employment verification and source of down payment funds qualification. This latter format becomes a "virtual" mortgage commitment subject to finding a home and having it appraised. If a buyer is going to ask you to take your home off the market for 30-45 days in which to get mortgage approval then you should at the very least determine that source of funds for down payment, and credit check with the results given to you in writing by a qualified mortgage lender.

10. Closing the deal.
Ask your attorney for a HUD settlement statement, also known as a RESPA Uniform Settlement Statement, which will contain all of the information about the loan and the parties that participate in the settlement. The HUD form is customarily prepared in the final moments prior to closing, but can be reviewed in an informal manner earlier. An informal review of a RESPA form will raise questions and will provide insight to the settlement process, which will include fees, transfer tax, credits, property taxes, and seller's net proceeds.

Using today's technology to help sell your home. To not overestimate, do not underestimate the value of today's technology. The use of the World Wide Web is one of the newest of many tools that a real estate company uses in the marketing of your property. Ask to see your Realtor's Web page and be sure that it includes pertinent information about the "process" leading to the sale. The single greatest factor in the use of the Internet is the distribution of information. Today's home sellers and home purchasers are progress driven. By process, we mean customs, trends, market conditions, contributing factors such as interest rates, community profiles, school information, and anything that would inform the consumer about the general safety and well being of one's family as they have their "American Dream" come true.

When Selling Your Home, First Impressions, Can Help Make The Sale
LET YOUR HOME SMILE A WELCOME TO BUYERS

1. First impressions are lasting. The front door greets the prospect. Make sure it is fresh, clean and scrubbed looking. Keep lawn trimmed and edged, and the yard free of refuse.

2. Decorate for a quick sale. Faded walls and worn woodwork reduce appeal. Why try to tell the prospect how your home could look, when you can show him by redecorating? A quicker sale at a higher price will result. An investment in new kitchen wallpaper will pay dividends.

3. Let the sun shine in. Open draperies and curtains and let the prospect see how cheerful your home can be. (Dark rooms do not appeal).

4. Fix that faucet! Dripping water discolors sinks and suggests faulty plumbing.

5. Repairs can make a big difference. Loose knobs, sticking doors and windows, warped cabinet drawers and other minor flaws detract from value. Have them fixed.

6. From top to bottom. Display the full value of your attic and other utility space by removing all unnecessary articles.

7. Safety first. Keep stairways clear. Avoid cluttered appearance and possible injuries.

8. Make closets look bigger. Neat, well-ordered closets show that space is ample.

9. Bathrooms help sell homes. Check and repair caulking in bathtubs and showers. Make this room sparkle.

10. Arrange bedrooms neatly. Remove excess furniture. Use attractive bedspreads and freshly laundered curtains.

11. Can you see the light? Illumination is like a welcome sign. The potential buyer will feel a glowing warmth when you turn on all your lights for an evening inspection.

WHEN THE AGENT SHOWS THE HOUSE

12. Three's a crowd. Avoid having too many people present. The potential buyer will feel like an intruder and will hurry through the house.

13. Music is mellow. But not when showing a house. Turn off blaring radio and television. Let the salesman and buyer talk, free of disturbances.

14. Pets underfoot? Keep them out of the way- preferably out of the house.

15. Silence is golden. Be courteous but don't force conversation with the potential buyer. He wants to inspect your house - not pay a social call.

16. Be it ever so humble. Never apologize for the appearance of your home. After all, it has been lived in. Let the trained salesman answer any objections. This is his/her job.

17. In the background. The salesman knows the buyer's requirements and can better emphasize the features of your home when you don't tag along. You will be called if needed.

18. Why put the cart before the horse? Trying to dispose of furniture and furnishings to the potential buyer before he has purchased the house often loses a sale.

19. A word for the wise. Let your Realtor discuss price, terms, possession and other factors with the customer. He is eminently qualified to bring negotiations to a favorable conclusion.

20. Use your agent. Show your home to prospective customers only by appointment through your agent. Your cooperation will be appreciated and will close the sale more quickly.

The 9 Dumbest Mistakes Smart People Make When Buying or Selling A Home

Home Buyers:

Mistake #1: Not knowing how much they can afford before they make an offer.
The easiest way to avoid this mistake is to get pre-approved for a mortgage by a lender so you know in advance exactly how much you can afford.

Mistake #2: Not realizing in advance who the real estate agent represents.
Most people think that the agent they are working with is working for them. Unless they are working as your buyer representative, they represent the seller.

Mistake #3: Not realizing that the wrong mortgage can cost thousands of dollars in needless interest and taxes.
Check with your accountant before you make your final decision on which mortgage you are going to choose. Your CPA will be able to tell you what the long term effects will be on your income.

Mistake #4: Not discovering hidden defects before they buy a home.
One of the most expensive mistakes is also one of the easiest to avoid, by having a professional pre-purchase home inspection.

Mistake #5: Not knowing how much their credit can affect their ability to buy or refinance a home.
Before you buy a home, many of the clouds on your credit history can be cleared up or even eliminated. Your mortgage professional can help you review and prepare your credit file in advance.

Home Sellers:

Mistake #6: Failing to "showcase" their home.
First impressions are the most important. Experience shows that for every $100 in repairs that your home needs, a buyer will deduct $300-$500 from their offer. Thoroughly clean and prepare your home before you put it on the market if you want top dollar.

Mistake #7: Signing a listing contract with no way out.
Most traditional real estate agents want you to sign a listing contract with no way out. When you list your home with us, you can cancel your listing agreement at any time, no questions asked.

Mistake #8: Choosing the wrong agent or choosing them for the wrong reasons.
Many homeowners list their home with the agent who tells them the highest price, is related to them, or works for the largest company. You need to choose the agent with the best marketing plan and tract record to sell your home.

Mistake #9: Not knowing all of their legal rights and obligations.
Real estate law is complex. The contract that you will sign when selling your home is legally binding. Small items that are neglected in a contract can wind up costing you thousands of dollars. You need to consult a knowledgeable professional who understands the in's and out's of a real estate transaction.

Four Common Mistakes Made By Home Sellers... And How To Avoid Them

1. Not Preparing Your Home To Look Attractive To Buyers.
Currently, your home is competing with 3,937 other homes in 39 towns in Morris County, and all price ranges. Buyers buy on emotion, not logic. The best marketing program in the world can only bring lots of buyers into your home, it can't make them like the home.

2. Signing A Long Term Listing Without A Written, Specific Performance Guarantee.
Don't rely on verbal promises. Make sure that you receive a written promise stating that you can cancel without charge if the performance is other than what was promised.

3. Selecting The Wrong Price.
A Word Of Caution: Stay away from real estate agents who simply ask you what price you want for your home and agree to list it at that price. This practice can be in conflict with your best interests. By setting an unrealistically high list price, you could greatly extend the length of time it takes to sell your home. In fact, a house that is put on the market at too high a price often develops "market shyness", making it very difficult to sell; and you could end up getting even less than the fair market value of your home.

The basic point is that if, for example, several agents tell you the most your house will probably sell for is $90,000 and someone else tells you that he or she can get you $110,000, don't jump for joy that at last you have found the one agent who sees what the others have missed.

Integrity is the key here. A good agent should tell you what you need to hear to accomplish your desired results, not what you want to hear.

4. Not Insisting On A Written Pre-Approval For The Buyers Home Loan Before Completing The Attorney Review Stage.
In today's fast paced technological world any prospective purchaser can be pre-qualified for a mortgage prior to finding a home. The levels of pre-qualification can range from an informal credit review to a complete buyer credit history analysis, including all 3 credit bureaus and credit scoring, employment verification and source of down payment funds qualification. This latter format becomes a "virtual" mortgage commitment subject to finding a home and having it appraised. If a buyer is going to ask you to take your home off the market for 30-45 days in which to get mortgage approval then you should at the very least determine the source of funds for down payment, and credit check with the results given to you in writing by a qualified mortgage lender.

Sellers Estimated Closing Costs

This worksheet can be used to prepare an estimate of the costs entailed in the closing of a home from the perspective of the seller.
LEGAL FEE - Generally $500-650, depending on the attorney and the transaction$________
REAL ESTATE COMMISSION - Depends on the terms of the listing agreement$________
REALTY TRANSFER TAX - Rate Fixed to sale price of house. Consult your attorney for possible exemptions
NJ: About $3.50/11,000
CT: $1.10/$l,000 to town, and 1/2 of 1% of sale price to state
NY: $4.00/$l,000 		$________
MORTGAGE CANCELLATION FEE - Usually required if mortgage is prepaid before original term is reached. May be charged by lender and/or local government. $________
OTHER LIENS - Must be removed from property before sale. Includes local government filing fees.$________
TAX ADJUSTMENT - Usually a credit (sometimes a charge) to seller, to adjust for taxes paid short of-or beyond-the closing date.$________
WATER/SEWER ADJUSTMENTS - Same as other tax adjustments.$________
VA LOANS - Seller is responsible for points, repairs, certifications as included in sale contract; and for fees required by lender.$________
INSECT DAMAGE REPAIRS - As may be required following inspection.$________
ENGINEERING REPAIRS - As may be required following inspection.
$________
ESTIMATED TOTAL$________
These figures are just estimates. It is suggested that you consult your attorney for any closer estimates of the costs for your particular situation. A short time before closing, your attorney should be able to provide you with much more precise figures for your closing costs.

Donna Nelson of RE/MAX Neighborhood Properties
339 Main Rd., Montville, NJ 07045
(973) 334-3341 || Fax: (973) 334-3348
Eve: (973) 872-1227 || Cell: (201) 400-2402
Each Office Independently Owned & Operated
Serving Boonton, BoontonTwp, Butler, Chatham, Chester, Denville, Dover, East Hanover, Florham Park, Hanover, Harding, Jefferson, Kinnelon, Lincoln Park, Long Hill, Madison, Mendham, Mine Hill, Montville, Morris Plains, Morristown, Morris Twp., Mount Arlington, Mount Olive, Mountain Lakes, Netcong, Parsippany, Pequannock, Randolph, Riverdale, Rockaway, Roxbury, Washington Twp., and Wharton.